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Veda To Refund Customer After Privacy Rule Breach

Monday, February 27, 2017 - Posted by Michael McCulloch

Veda Advantage has recently been forced to refund thousands of customers after an investigation by the Office of the Australian Information Commissioner.

This follows a series of complaints made in late 2014 to the Financial Rights Legal Centre, Consumer Action Law Centre, Financial Counselling Australia and the Australian Privacy Foundation where consumers elected to utilise the paid service to obtain copies of their credit reports under Veda's expedited delivery.

The Privacy Commissioner found that Veda breached a series of privacy rules including:

  • Charging for “expedited delivery” of a credit report where the consumer had not sought access to a credit report in the previous 12 months;
  • Failing to prominently state on its websites that consumers have a right to obtain their credit reporting information free of charge;
  • Did not take reasonable steps on its websites and phone line to ensure that the option of free access to a credit report was as available and easy to identify as access to paid credit reports; and
  • Used personal information it held on consumers for the purposes of direct marketing in breach of privacy rules.

Kat Lane, Financial Rights Legal Centre Acting Coordinator said in a statement, "This is a big win for consumers who simply want free access to their credit report as is their entitlement under the law. The Privacy Commissioner has confirmed that consumers are entitled to a free report and gaming of the system to advantage the commercial interests of credit reporting agencies is not allowed."

A small number of other allegations were not upheld by the Commissioner. These related to:

  • Veda not including ‘Vedascore’ information in free reports: the Commissioner found that the Veda Score was not information ‘held’ by Veda, rather it is dynamically generated at the point of application;
  • Veda not providing the credit report within 10 days: the Commissioner found that there was no evidence of a systemic problem rather the incident complained of was a singular breach;
  • Veda charging for credit reports when a consumer hadn’t received a free report: The Commissioner found that if a consumer has had the opportunity to choose a free credit report but chooses a paid report in the hope for additional value, then this is not a breach; and
  • Veda excessively charging for credit reports after a free report has been provided: The commissioner found that there was not enough information to know whether $79.95 is excessive.

Ms Lane went on to say, "While we are disappointed with the findings on these points, the central principles hold: consumers are entitled to a free credit report and credit reporting agencies can’t manipulate the system for their own commercial advantage. We expect the Privacy Commissioner to oversee both Veda’s refund process and implementing the required changes to their phone service and websites.”

In response to the investigation a Veda spokeperson said, "Veda will be taking action in relation to two complaints: Within six months we will enable phone requests for free credit files, in the same way as may be made for premium products. Customers who purchased a $69.95 MyCreditFile express credit report on or after 12 March 2014 may be eligible for a refund - Veda will be alerting eligible customers."

Read the decision and reason for decision of Australian Privacy Commissioner, Timothy Pilgrim, here.

Source: The Sydney Morning Herald - Credit Reporting Bureau Veda to Refund Customer After OAIC Found It Breached Privacy Rules

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